China, Middle East refining boom to offset plant closures in Europe

OPEC says rising Chinese refining capacity over the next five years can compensate for European closures. Meanwhile, Middle East refiners will add at least four new projects.

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By KONSTANTIN ROZHNOVBloomberg

An increase in Chinas oil-refining capacity over the next five
years will compensate for plant closings in Europe, and refiners in the Middle
East will add at least four projects in the same period, OPEC
said in a forecast.

Refineries worldwide will boost capacity by about 8.6 million
bpd from 2013 to 2018, with China accounting for 2.5 million
bbl of the expected increase, the Organization of Petroleum
Exporting Countries said Thursday in its World Oil Outlook
report.

New plants in Jubail, Yanbu and Jazan in Saudi Arabia and the
expansion of the Ruwais refinery in the United Arab Emirates
will contribute capacity in the Middle East, according to
OPEC.

The group, which supplies about 40% of the worlds oil,
noted a trend for global capacity additions to be in
excess of expected demand increases as the process of capacity
relocation between the worlds major regions
continues.

Oil refiners in Europe will shut 10% of their plants
this decade as fuel demand falls to a 19-year low, a
Bloomberg survey of six European refinery executives showed in
April.

To run at or near their full potential, refineries in
these regions must succeed in either exporting product and/or
backing out imports, according to the report. In
other words, they will be competing for products exports
markets with US and European refineries.

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